Home > Fraud Awareness, SID Information > Employer Fraud: When your competition isn’t paying… you pay more!

Employer Fraud: When your competition isn’t paying… you pay more!

Twenties and Coins

Fraudulent employers hurt honest employers. When employers cheat the system, honest employers have to pay additional premiums and are placed at a competitive disadvantage. Here’s how:

BWC maintains a State Fund to pay for services provided to injured workers. This fund can be seen as a pot of money that must be filled by Ohio’s employers. For every dollar dishonest employers don’t contribute, honest employers are forced to pay an extra dollar. Fraudulent employers are then able to undersell honest employers due to their lower labor costs.

We recognize the impact this causes to Ohio’s employers. In 2005, our department created the Employer Fraud Team to exclusively investigate this type of fraud. During the last two years, the Employer Fraud Team made 160 criminal referrals for prosecution to state, county and local prosecutors. Also during the last two years, their work has resulted in the identification of over $7.5 million in premium and penalties owed to BWC’s State Fund.

Since their existence, the Employer Fraud Team has identified the following common employer fraud schemes:

  • Employers operating without workers’ compensation coverage or ceasing to pay for their workers’ compensation coverage;
  • Underreporting payroll by misclassifying and misrepresenting types of employees;
  • Falsifying a BWC Certificate of Premium Coverage to appear to be compliant; and
  • Shifting payroll to different policies to avoid negative experience ratings.

During the month of August, we will be discussing each of these common employer fraud schemes, introducing other BWC departments tasked with regulating employers and describing projects that our department’s Intelligence Unit undertakes to detect employer fraud.

Our next article will discuss employers that operate without coverage and employers that fail to maintain workers’ compensation coverage, our two most common employer fraud complaints.

To report fraud online, please visit: http://bit.ly/reportfraud.
To speak with a fraud hotline agent, please call: 1-800-OHIOBWC.

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